Numerical simulations are conducted to investigate how a droplet of Newtonian liquid. entrained in a higher viscosity Newtonian liquid, behaves when passing through an axisymmetric microfluidic contraction. Simulations are performed using a transient Volume of Fluid finite volume algorithm, and cover ranges of Reynolds and Weber numbers relevant to microfluidic flows. Results are presented for a droplet to surrounding fluid viscosity ratio of 0.001. In contrast to behaviour at higher viscosity ratios obtained previously by the authors, shear and interfacial tension driven instabilities often develop along the droplet Surface. leading to complex shape development, and in some instances, droplet breakup. (c) 2006 Elsevier Ltd. All rights reserved.